The EUR/USD currency pair continues to experience downward pressure during the Asian session on Friday, trading in the range of 1.1680-1.1675, just above a two-week low reached the previous day. Despite a temporary extension of a ceasefire, stagnation in peace talks—exacerbated by a US naval blockade of Iranian ports—dampens expectations for a lasting de-escalation, leaving investors feeling uneasy.
Compounding this uncertainty, rising crude oil prices have reignited inflationary concerns, further cementing hawkish expectations from the US Federal Reserve. These factors combine to help the US Dollar maintain gains achieved over the past three days, providing a hindrance to the EUR/USD pair’s prospects.
Technically, the currency pair is currently hovering around the 200-period Exponential Moving Average (EMA) on the 4-hour chart, indicating a neutral immediate bias following a recent decline. Furthermore, a breakdown below the 38.2% Fibonacci retracement level from the March swing low supports a bearish outlook for the EUR/USD. The Relative Strength Index (RSI), positioned near 32, signals ongoing downside momentum.
Additionally, a slightly negative reading from the Moving Average Convergence Divergence (MACD) underscores a lack of significant bullish momentum, despite the EMA support. In terms of immediate support levels, further weakness could find a foothold around the 50.0% Fibonacci retracement at 1.1648. A decisive break below this level could clear the way toward deeper retracement points at 1.1600 and 1.1532, potentially reaching a cycle floor at 1.1445.
On the upside, initial resistance is identified at the 38.2% Fibonacci retracement level at 1.1696. A break above this barrier would introduce the next challenge at the 23.6% retracement level of 1.1755. However, the overall trend suggests that downside risks prevail for the EUR/USD pair, with any significant recovery likely to be met with selling pressure.
Accompanying this analysis, the week’s performance of the US Dollar against other major currencies has shown the USD emerging strongest against the Swiss Franc, while noting weaknesses against the Euro, British Pound, and Japanese Yen. This underlines a mixed week for the Dollar, further influenced by geopolitical tensions and central bank expectations.
